This invention relates generally to a method of using a database through a network such as the Internet, interactive voice response system, or other data networks. In particular, the present invention is concerned with a method of designing benefits and managing healthcare reimbursements based on information stored in a database.
Health plans have traditionally been in the business of collecting premiums from employers, unions, the government, individuals, or other customers and arranging for members covered by the premium to receive services from hospitals, physicians, or other healthcare providers. The plan subsequently reimburses the providers for services they performed.
It is common for members to share in the cost of these services by paying either copayments or coinsurance (cost-sharing) to providers, which the health plans negotiate with customers. The amount may vary between services, but not between members or providers. Therefore, different members going to different providers for the same service will pay identical cost-sharing. Effectively, there are no economic forces at play in the member's choice of provider.
Health plans also negotiate reimbursements with providers. Reimbursements may vary between services. For example, surgeries may be paid at a higher rate than office visits. Reimbursements may also vary between products. For example, providers belonging to a preferred provider option may be reimbursed differently for the same service furnished by a provider belonging to a health maintenance organization. In addition, reimbursement may vary by provider. For example, popular providers may be paid more than less popular providers, or providers with geographic exclusivity may be paid more than those who have many competitors. Members pay the same cost-share regardless of which provider they choose. Since there is no difference in cost from the member's perspective, normal market economics are not at play. This system has prevented providers from differentiating themselves from other providers and marketing their skills to consumers.
The healthcare industry in the United States stands at a cross roads between a government-driven and a market-driven approach. While proponents of the government-driven model advocate consumer rights, further government regulation will ultimately be detrimental to the consumer. Therefore, there needs to be a lead in a move toward the market-driven approach. This invention will facilitate the market-driven approach.